Jun 09, 2026 | 4:37 am
India’s tax authorities have identified INR700 billion ($7.4 billion) in transactions connected to illegal online gaming and betting over a single financial year. The Directorate General of GST Intelligence (DGGI) uncovered the activity during a 14-month investigation into networks suspected of facilitating money laundering.
The agency has proposed changes to payment reporting that would give investigators more information about the websites directing users to make payments. The recommendations were submitted to the Central Board of Indirect Taxes and Customs earlier this month, according to officials cited in reports on the investigation.
The INR700 billion figure represents the value of transactions detected by investigators. It does not indicate operator income, unpaid tax or the amount lost by the government. Authorities continue to assess the potential revenue impact.
Authorities Seek Greater Visibility Into Payment Routes
DGGI wants payment records to show which website directed a user to initiate each transaction. The agency also proposed requiring disclosure of every bank account connected to a website’s goods and services tax registration.
Such information could help authorities follow money as it moves between accounts and identify those receiving or transferring funds on behalf of illegal betting websites.
Under current arrangements, banks and payment gateways generally record the merchant that receives a payment. Investigators can face additional work when an illegal gambling platform sends customers to a proxy merchant company. In those cases, authorities must separately establish the connection between the merchant and the gaming website.
The proposed reporting changes would therefore provide a clearer link between the original website and the payment recipient.
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New Reporting Duties Remain Under Discussion
Authorities have yet to establish which participants in the payment chain would have to collect and retain the additional information. Possible parties include gaming platforms, payment gateways, aggregators and banks.
The government also needs to determine how investigators would verify the website identified as the transaction’s origin. The proposals remain under consultation because the additional requirements could increase due-diligence responsibilities for banks and payment companies.
The recommendations follow the introduction of a broader regulatory framework for India’s online gaming industry. The Promotion and Regulation of Online Gaming Rules, 2026 came into force on May 1, activating the Promotion and Regulation of Online Gaming Act, 2025.
The framework divides online gaming into esports, online social games and online money games. It seeks to distinguish permitted activities from formats associated with financial harm, addiction and illegal activity.
India’s online gaming sector generated INR232 billion in 2024, with transaction-based gaming accounting for 77 percent of the total. The market is projected to reach INR316 billion by 2027, with annual growth estimated at 11 percent.
The latest DGGI recommendations form part of the government’s wider effort to restrict financial activity linked to prohibited online money games. The 2025 Act prohibits online money games and prevents banks and payment systems from processing transactions associated with them.
The investigation is continuing, with the exact scale of any tax or government revenue loss yet to be established.
Source:
“India tax agency traces $7.4B in illegal betting transactions, seeks payment trail”, agbrief.com, September 3, 2026